1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 7-2 Balance Sheet Information on a Work Sheet Original created by M.C. McLaughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School

2. CENTURY 21 ACCOUNTING © Thomson/South-Western BALANCE SHEET A balance sheet reports financial information on a specific date, indicating the financial condition of a business. Information to prepare a balance sheet is obtained from the work sheet’s account title column and the balance sheet account balance columns A balance sheet has 4 sections: Heading Assets Liabilities Owner’s Equity 2 LESSON 7-2

3. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 7-2 BALANCE SHEET page 187

4. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 7-2 HEADING OF A BALANCE SHEET page 187 1 2 3 1.Center the name of the company on the first line. 2.Center the name of the report on the second line. 3.Center the date of the report on the third line.

5. CENTURY 21 ACCOUNTING © Thomson/South-Western ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET 5 LESSON 7-2  A balance sheet reports information about the elements of the accounting equation  Assets = Liabilities + Owner’s Equity  The assets are on the LEFT side of the equation and on the LEFT side of the balance sheet  Information needed to prepare the assets section is obtained from the work sheet’s balance sheet debit column  Information needed to prepare the liabilities section is obtained from the work sheet’s Balance Sheet credit column

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 7-2 ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET page 188 4 Liabilities 1 Assets Total Liabilities8 2 Account titles 3 Asset amounts Single line 7 6 Liability amounts 5 Account titles Total of liabilities 9

7. CENTURY 21 ACCOUNTING © Thomson/South-Western OWNER’S EQUITY SECTION OF A BALANCE SHEET 7 LESSON 7-2 Two kinds of equities are reported on a balance sheet: Liabilities, and Owner’s equity Only the amount of current capital is reported on the balance sheet. Current capital is calculated as shown: Capital Account Balance + Net Income – Drawing Account Balance = Current Capital

8. CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 7-2 OWNER’S EQUITY SECTION OF A BALANCE SHEET page 189 7 Total Liab. and Owner’s Eq.5 Total Assets 1 Owner’s Equity 2 Account title 3 Capital amount 4 Single line 6 Total of assets 8 Total of Liabilities and Owner’s Equity 9 Compare totals 10 Double lines

9. CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 7-2 OWNER’S EQUITY REPORTED IN DETAIL ON A BALANCE SHEET page 190 2 Beginning capital amount 6 Difference 8 Current capital amount 1 Beginning capital 3 Net Income 4 Drawing Ending capital 7 9 Total Liabilities and Owner’s Equity 5 Single line